"The real issue is software engineers and firms are not liable for errors caused by their software."

No, for a couple of reasons. First, the programmers are typically working directly for the company doing the trading; it's too secretive to be "outsourced" to some outside software firm.

But mainly: the REAL issue is simply that algorithmic trading is simply a BAD IDEA. Just like the "algorithmic" price-setting on Amazon that led to new books priced at over $1,000,000.00, algorithmic trading, sooner or later, will result in a loop causing at least some stocks in the market to crash while others will be mo